There has been a glimmer of hope on the horizon for stock investors recently, and while the all-clear rally flag is not being waved, it does appear that some of the worst is behind us. The consumer and producer-price-index numbers for October seem to indicate that we may have hit “peak inflation,” and are starting to come down. If that is indeed the case, brighter days may indeed be ahead.
While many feel that the recent rally is of the bear market variety, toss in the potential for the Santa Claus rally, which tends to be the ultimate seasonality play, and investors might be able to make some hay while the sun shines the balance of 2022.
We screened our S&P 500 equity research database looking for companies offering the biggest and most dependable dividends, are Buy rated, and offer solid total return potential. We avoided mortgage REITs and variable dividend energy companies. Five companies look like outstanding ideas for concerned investors and pay among the highest dividends in the venerable S&P 500 index. It’s important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Coterra Energy
This company was formed by the closing of the $17 billion merger of Cabot Oil & Gas Corp. and Cimarex Energy Company in 2021. Coterra Energy Inc. (NASDAQ: CTRA) is an independent oil and gas company, engaged in the development, exploration and production of oil, natural gas, and natural gas liquids in the United States. It primarily focuses on the Marcellus Shale, with approximately 177,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania.
The company also holds Permian Basin properties with approximately 306,000 net acres; and Anadarko Basin properties located in Oklahoma with approximately 182,000 net acres. In addition, it operates natural gas and saltwater disposal gathering systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities.
As of December 31, 2021, it had proved reserves of approximately 2,892,582 thousand barrels of oil equivalent, which include 189,429 thousand barrels of oil and other liquid hydrocarbons, 14,895 billion cubic feet of natural gas, and 220,615 thousand barrels of natural gas liquids.
Coterra shareholders are paid a strong 9.05% dividend. Stifel has a Buy rating and a $40 target price. The consensus is posted at a much lower $36.13. Coterra shares were last seen Wednesday at $27.54.
Altria
This maker of tobacco products offers value investors a great entry point now and was hit recently as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates, and Philip Morris Capital Corp. PMUSA enjoys a 51% share of the US cigarette market, led by its top cigarette brand Marlboro.
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